Microsoft no longer thinks Linux poses a threat to its desktop Windows business.
Directions on Microsoft's Wes Miller pointed out via Twitter how Microsoft has changed the boilerplate "Competition" section in its last two annual financial filings with the SEC.

Well except that Windows 7 still likes to try to control your environment far too much for my likes.

I really can't stand using Windows for much more than launching games.

If they ported Steam and all the games under it for Linux, I can pretty much guarantee a lot of people would switch. The only reason that hasn't happened with the Mac OS X port, is that the initial purchase price of Macs are still WAY too high for the hardware you get.